During a four year period when both shares and property have largely been outperformed by conservative asset classes such as cash, term deposits and bonds, some investors are questioning the wisdom of investing in growth assets for the 'long term'.

Most of us have heard the logic about investing in assets that provide a hedge against the capital eroding influence of inflation, but certainly periods such as this can test our patience and our resolve.

This is particularly the case when the media is so effective in its fear mongering that we might wonder whether even the great Warren Buffett is on the cusp of a panic attack, let alone the rest of us.

So why is investing for the long term important?

There are a couple of good reasons but arguably the most important is longevity risk - the risk that you will outlive your money.

Certainly a reasonably frequent client comment for someone that is entering retirement is 'I don't have long term'.

While this is an amusing observation it is not ordinarily a correct one.

 The life expectancy for an Australian male is now 79 years of age and for a female it is 84 years of age. Importantly if both the male and female of a couple are still alive at retirement the chance of one of them living to greater than 84 years of age is higher again.

So certainly for a couple retiring at age 65 they definitely need to be funding at least the next twenty years, and there is every likelihood that they do have 'long term'.

As we look at funding retirement to at least our mid 80s, we must consider that life expectancies continue to creep upward, slowly but ever so steadily.

Certainly the thought of running out of money at age 85 and living to age 95 would trouble most.

In addition, running short of capital in an era when demand for nursing home positions and health care services is increasing is not an attractive thought when you consider that Governments are likely to continue to seek spending cuts in these areas.

So investing for the long term is, for most, essential. In our experience, a well diversified portfolio that has exposure to quality assets within each asset class is the most sensible approach. While conservative assets have temporarily outperformed in the short term they won't over the long term.

To talk about your future  contact Lawler Financial Services on (02) 49428 700. Lawler Financial Services provides a comprehensive and holistic suite of services to clients in investment and retirement planning, superannuation, insurance and borrowing. We make financial information easy to understand so you can play an active role in your wealth creation journey or  alternatively, we can do the complex work while you kick back and enjoy the results.